Grain processors gather for industry forum in Ukraine, September 2017 Grain processors gather for industry forum in Ukraine, September 2017

29 September, 2017

Developing higher-value products and tapping into new export markets on the agenda.

Although Ukraine is one of the world’s leading grain exporters, it has traditionally exported more bulk agricultural commodities than higher-value processed goods such as flour.

The Third Grain Processors Forum: Market & Technologies took place in Odessa, Ukraine this week (28 and 29 September). The Forum was organized by the Union “Millers of Ukraine” with support from the Food and Agriculture Organization of the United Nations (FAO) and the European Bank for Reconstruction and Development (EBRD).

This year’s event drew about 150 people, including representatives of Ukraine’s grain-processing industry – such as flour and groats producers and traders – technology providers, and international market experts. Grain-processing industry representatives from Kazakhstan, Kyrgyzstan and Uzbekistan joined the discussions thanks to support from FAO’s Regional Initiative on Agrifood Trade and Regional Integration in Europe and Central Asia.

Participants learned more about production of organic and enriched flours, new processing technologies, the global market for flour and grain products, and tariff and non-tariff barriers in importing countries.

“Exporting products with added value is more challenging than exporting grain because it requires better market access and investment in logistics,” said FAO economist Dmitry Prikhodko. “Certain markets require mandatory flour fortification. The international market for flour and grain-processing products is growing and there are good prospects for Ukrainian producers.”

Diversifying exports

FAO and the EBRD have been supporting Ukraine’s grain-processing industry in recent years – making grain quality information more readily available, and facilitating export development activities.

With FAO and EBRD assistance, industry representatives recently participated in trade shows in Hong Kong, Tanzania, Indonesia and the United Arab Emirates, and in training events and conferences to deepen their knowledge of market opportunities, sanitary and phytosanitary standards, and quality and technological innovations in flour production.

In the 2016-17 marketing year, Ukraine was the world’s seventh largest exporter of wheat flour, exporting US$ 82 million worth of flour – a 13 percent increase over the previous year.

“It’s important for the industry in Ukraine to continue increasing and diversifying its exports, especially by capturing market segments with higher added value, but also by tapping into new fast-growing markets,” said Vasyl Hovhera, agribusiness economist with the EBRD. “This would require significant investments in quality improvement, adoption of innovative technologies, development of new products, and establishment of reliable and highly efficiency supply chains.”

Next steps

Since 2009, FAO and the EBRD have been facilitating public-private policy dialogue in Ukraine’s grain sector – the success of which has been transferred to other sectors.

Work with professional associations such as the Union “Millers of Ukraine” has driven sector development.

Next up, FAO and the EBRD will work with the Union on a strategy to improve sector regulation, support quality improvements, and increase exports of Ukrainian milling products.

“Based on this year’s export results, we can make a strong prediction that positive trends will persist,” said Rodion Rybchynsky, the Union’s Chief. “We believe this is the result of sector cooperation. By working together, flour producers can also concentrate on improving technology and developing new products.

About the Union ‘Ukrainian Millers’

Union "Millers of Ukraine" was established to support the Ukrainian producers of flour, groats, and other grain by-products. The main goal of the association is to protect the interests of representatives of the grain processing industry in the country, and coordinate the export policy to expand markets.